LONDON (Reuters) – The dollar struggled on Tuesday a week as traders worried about the prospects for the green dollar amid a large package of US fiscal stimulus.
Investors have raised the dollar in recent weeks as Democrats stepped up to accelerate President Joe Biden’s $ 1.9 trillion COVID-19 aid package, but some analysts say massive fiscal spending coupled with continued monetary policy continues. Federal Reserve’s lightweight, will be a reverse dollar.
“Opinions on the effects the package will have on the US economy differ,” Commerzbank strategists said.
“While until recently the prospect of fiscal support has provoked positive reactions in the markets, the market no longer seems to be fully sure of this.”
After trying to return to the previous session, the dollar generally weakened against its counterparts as US Treasury yields softened from highs overnight.
The biggest beneficiary of the weakening dollar was bitcoin cryptocurrencies, which topped $ 48,000, based on a nearly 20% increase overnight, after Tesla Inc. announced a $ 1.5 billion investment in digital assets. .
The dollar index was 0.3% lower at 90.73 at the start of trading in London, after falling to 90.603 for the first time since February 1.
Disappointing US job data on Friday drew wind from a two-week rally that lifted the dollar to a two-month high of 91.6.
The euro rose 0.2% on Tuesday to $ 1.20775, up from a two-month low of $ 1.9520 on Friday.
The British pound revised its highs in May 2018, rising to $ 1.3784 in Asia. The last trading increased by 0.3% to 1.3774 USD.
Chart: USD-Positions
Reporting by Saikat Chatterjee; Montage by Kirsten Donovan